Portrait of a citizen: Young Business Owner

Employer contributions and a feeling of nervousness

William has never been particularly concerned about the need to have a business, but when he landed a contract worth of 25.000 Danish crowns, he decided it was time to start a business. However, this brought a new worry into his life.

”After I submitted the form to set up my company, I was sent a touchy-feely little brochure which said that we business owners were the backbone of Danish society. I had not expected something like that from a government department”

William, Business Owner, 23 years

In his tiny one-man business, Nørrebro Drys, William sells graphics, textile designs and DJ gigs. He thinks he is lucky to be doing what he is doing.

“The most fun stuff I do is also what I’m making money from,” he grins. He has never been particularly concerned about the need to have a business, but when he landed a contract worth of 25.000 Danish crowns, he decided it was time to start a business. However, this brought a new worry into his life.

“I feel nervous every time I get a letter from the tax authorities. I worry there’s going to be a load of numbers and that I won’t understand what they’re doing there. When I was just getting my student grant and had a part-time job, I could hardly have done anything wrong. Now I can,” he says.

William thinks it is hard to understand under which circumstances government considers him a business owner and when he is considered a regular citizen. On the tax authority’s website he has to log in to both the Business and the Personal systems in order to correctly submit his tax return.

“The University of Zanzibar’s website is easier to understand than the Danish tax authority. When I need to check my annual tax return, for example, I can only do it on the ”Personal” system, and I’ve never actually understood why they’ve organized it that way.”

William is also unsure about what he is allowed to deduct against his taxes. He has just completed a Design School textile project, and hopes to be able to sell one of his designs to a bed linen company, but can he claim a deduction for his expensive textile markers?

“I don’t know whether I’m supposed to sit and design directly for my customer with the markers, or whether it is supposed to be for the company in a more general sense. So I end up arguing backwards and forwards with myself before I decide what to do. It all gets to be rather contradictory,” he says.

Last year, William got a letter from the tax authorities saying that he had not paid his employer contribution and therefore owed 1500 kr. This was a lot of money to William, who never understood why he owed it in the first place.

“I don’t think SKAT is setting out to cheat me, but it is impossible to work out where that number came from. And when they send you such a cold dismissive letter making the case for you to be deprived of a lot of money, you really feel powerless”.

Fortunately William had help from his older brother, who discovered that William had already paid the amount in question along with his general taxes and therefore only owed 500 crowns. William has now informed the tax authorities of this, but they have not sent a response. William hopes he will soon be able to afford to have an accountant do his bookkeeping and review his tax affairs. It is too complicated for him to tackle himself.